Chapter 11 – Week 6.
“Money in our society spells power – a power women have long been denied – those who have learned to deal with it effectively radiate a quality of confident self-assertiveness.”
– Annette Lieberman and Vicki Linder, Unbalanced Accounts
You have arrived at the last week of the course. Congratulations! I want you to know that the work you have done over the last few weeks is a manifestation of your independence. You are no longer relying on the outside world to take care of your financial issues; and you are no longer living in a fairy tale where you think money will somehow just “appear.” You have taken the power into your own hands.
It isn’t easy to dig into this material – especially when you have to let go of old belief systems and habits. Only women that are truly powerful, that value themselves, and are confident in their abilities would dare to do this work. You have faced your fears, your doubts, and your excuses. Few people will do this work. I want you to know that great rewards come to those who keep going despite fears and doubts. With the courage you have shown, the rewards will be life changing
I once saw a bumper sticker that said: “A husband is not my financial plan.” You are living this life now. You now have the attitude, skills and tools to take care of your finances.
When Something Ends, Something New Begins As always in life – the end of one thing is the beginning of something new. Now that you are finishing the course and you know exactly where you are financially, there are many places you can go from here.
Let’s recap where you are right now:
- You have an understanding of your money blueprint and how that has affected your decision-making in money matters up until now.
- You know your net worth.
- You know your monthly income.
- You know all of your expenses and how much money you spend monthly on each expense.
- You know whether you have a monthly net profit or net loss and the value of the profit or loss.
- You have learned about the importance of putting 10 percent of your earnings into savings in each
- You have learned how to increase your net income by letting go of some of your Nice To Haves on your expense sheet or by finding less expensive (or free) ways to attain the Nice to
- You know the value of your
- You know how to increase your hourly rate so that you are getting paid what you want and
Now that you have all of this information at your fingertips – let’s talk about how you can get started planning for financial freedom.
If you remember at the beginning of this course, I talked about how the first step toward financial freedom was becoming financially independent. This is the step you have been carefully working on since you started reading this book. The goal of this step is to get to a point where:
- You spend less than you earn (in other words, you have a monthly net profit), and..
- You are putting 10 percent of what you earn each month into savings to contribute towards your future.
The second step toward financial freedom is to start learning how to create passive income sources. Passive income is money earned that does not directly correspond to the hours you work at your job. It includes sources such as:
- Royalties from books, songs, films, scripts, art, software, games, and
- Real Estate – rental properties with positive cash
- Minimum Labor Businesses – Possibilities include parking lots, storage and self-storage units, Laundromats, campers/boats storage areas, coin car washes, video arcades, vending machines, campgrounds, billboards, and advertising
- Franchising & Licensing – licensing your system, licensing your methodology, and
- Network Marketing
Passive income can come from unlimited places when you are willing to start thinking creatively about your talents, your experience, and your strengths. When your passive income exceeds your expenses – so you can choose not to work, yet still be able to live the lifestyle you desire – then you are Financially Free.
I realize some of you might doubt your abilities to create passive income sources, but you need to remember that every journey starts with a first step. If you don’t know something, go and find someone who does know and start asking them questions that will educate you about the topic. Nothing builds self-confidence faster than taking action. Each action that you take will give you results – which will then generate more energy and courage for you to keep on going. The nice thing about this journey is that if you keep putting one foot in front of the other and just keep going one step at a time, eventually you will get there!
Although you are probably still integrating this course into your life and working on creating financial independence, I think it’s important for you to have information about what comes next in your journey toward financial freedom. If you can see where you are aiming, then you will have a much easier time with your navigation.
Let’s have a look.
What You Need To Know About Creating Financial Freedom.
The only way to start creating financial freedom is by having a mindset (that hopefully by now you possess) that says: “I create my life.” As we have talked about in previous chapters, many women believe that life happens to them. They see themselves as powerless and as a result, are always in a reactionary state. They are responding to what happens around them instead of creating what they want in their life. Thinking this way, as you may recall, creates a victim mindset. Remember our discussion back in Chapter 3? Blaming, complaining, and making a lot of excuses about why we can’t get what we want – are all habits of the victim.
By taking the steps that you have in the last few weeks, you have shown yourself that YOU are the one who is in control and YOU are the one making things happen. I hope by now that you can see this clearly. By Taking Control of Your Money, you have created the conditions to achieve your dreams and goals and change the course of your financial future. Those who take charge (like you have) are creating the conditions for financial freedom.
Robert Kiyosaki, in his book The Cash Flow Quadrant, says that people usually earn most of their money as one of the following:
- Employee.
- Self-Employed (this includes small business owners and specialists).
- Big Business Owner (500 employees or more when the business is systemized and is not dependent anymore on the owner).
- Investor.
He says you can become rich in all of the quadrants, or you can be poor in all of the quadrants … but you can only become financially free in the last two categories. Why?
Because in the first two you have to work for your money. Let me explain this further.
In order to get paid as an Employee you need to come to work every day and trade your time for money. As a Small Business Owner or Specialist you also need to be present and do your job in order to get paid. You trade your knowledge for money and you are not free.
It is only when you move to being a Big Business Owner or Investor that you can become free because your business or your money is working for you.
I want to point out here that there is no need to have a 500-employee business to become free. You can become financially free with any business if you systemize it. You can systemize your business and additionally write books, record videos, and become THE expert on the subject of your business. By doing this, your knowledge will produce passive income without you needing to be there. You can take time off and your business will still run!
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The Four Quadrants show us that there are several ways of attaining income. When most people think about attaining income, they think about how to turn their working income into savings … and try to achieve financial freedom based only on their savings. They hope that they will get a high interest rate on their savings and that it will be big enough for them to live from. In today’s financial market, this is very difficult, and for most, maybe impossible. It’s like trying to move a truck when three of the wheels are flat! For this reason, I suggest focusing on these five factors.
- Working Income
- Savings
- Passive Income
- Investments
- Simplifying your life (the secret ingredient!)
For our purposes right now, I want to talk about the secret ingredient … simplifying your life! We go into detail on the rest in the Financial Freedom Intensive training.
Simplifying Your Life.
First, I want to make it clear that simplifying your life doesn’t mean living in a shack. It simply means re- evaluating what you need and what you don’t according to what is truly important to you. You already did a lot of this work in Week 4 of the course (Become Your Own Financial Manager).
Here are some more tips to help you:
- Clean out the junk: Spend 15 minutes every day going through a closet, a shelf, a drawer, and getting rid of anything you don’t need or cherish. Once you start weeding out these areas, you’ll become a lot more conscious of what’s really important to you and this will help you make better financial decisions in the future.
- Make a list of your top 4-5 most important things you want to What’s most important
to you? What do you value most in your life? Write down 4-5 things that you want do most in your life. Simplifying your life starts with making this list of your priorities.
- Evaluate your How do you spend your day? What things do you do from the time you wake up to the time you go to sleep? Make a list, and evaluate whether they’re in line with your priorities. If not, eliminate the things that aren’t, and focus on what’s important.
- Learn to say ‘no.’ This is crucial for those trying to simplify their If you can’t say no, you will take on too much.
And finally, create a simplicity statement. What do you want your simple life to look like? Spend a few minutes visualizing this and then write it down.
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You might not think that taking these simple steps will make that much of a difference, but when added up – they truly do!
For example, there is a woman I know who was a teacher in Los Angeles. She worked really hard. She was single and she owned her own apartment. She was feeling overwhelmed with a lot of things in her life and she decided that she needed to simplify.
The first thing she did was sell her apartment (the market was good at that time!). She took the money, and instead of doing what most financial advisors tell you to do (which is buy a more expensive apartment with a higher value and get a mortgage for it), she put the money into an investment fund. That fund gave her a good yearly interest. She rented a place with a friend where the monthly rent was lower than the interest she was collecting. This meant that she had some passive income from the investment.
Her next decision was to set up her life so that she could work for six months in Los Angeles and then live in Tanzania for the other six months of the year, teaching in a local school. She knew there was a shortage of qualified teachers in her field in rural Tanzania and she could get paid for what she loved to do. She knew also that she would be living in a much less expensive place where her expenses would be very low. She went ahead and followed through on her plan. She created a life in Tanzania that was much simpler than her life in Los Angeles, and she felt so fortunate to live in one of the most beautiful places on earth!
So you see, when you make the decision to simplify your life, you don’t have to live in a shack to do it. You can actually live close to nature in a magical land.
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Final Exercise – Schedule Your Financial Planning.
Take out your calendar and mark down one hour per week during which you will continue to manage and plan your finances. And, block out some time that you will add to your financial education.
For the Week.
It’s the end of our 6-week program. I know that focusing for six weeks on finance and budgeting can demand a lot from you mentally and emotionally. You deserve a big celebration! Invite some friends and go for a glass of champagne at an uptown bistro, or do something else that makes you feel totally excited. Dress up for it, wear high heels, put on full make-up … and take it the whole way. Enjoy! You have done incredible work.
This 6-week course has dipped your toe in the water, and there’s much more wonderful information waiting for you to help you on your way to becoming financially free. So, whether it’s our course or another course, make sure that you keep on learning, keep on going and keep developing!
The next three chapters are dedicated to helping you integrate all that you have been learning into your life – and will answer some questions for you about how to move forward in your relationship with money, your husband/partner and your children.